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Take That stars consider world tour to pay £30m tax bill

Robert Mendick

New tour possible: Take That members Gary Barlow, Howard Donald, Mark Owen and Jason Orange in 2006. Barlow, Donald and Owen are facing a huge tax bill. Photo: Reuters/AP

The pop group Take That will consider a new world tour to pay a £30 million tax bill following a court case brought by Britain's tax department.

A source close to the band said three of the group’s members – Gary Barlow, Howard Donald and Mark Owen – were weighing up their options in the wake of a judgment that found a scheme in which the three men invested was set up for tax avoidance purposes.

The other two members of the group – Robbie Williams and Jason Orange – are not involved.

The trio will consider a legal appeal against Friday’s ruling. But they will also have to contend with further reputational damage if they choose to protest against the decision.

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An industry insider, with detailed knowledge of the music business, said the prospect of a huge tax bill, which will include interest payments on top, is likely to result in Take That embarking on a new world tour. The group last toured in 2011, earning the five members of the band, which dominated the charts in the 1990s, a fortune.

The three men invested £66 million into two partnerships styled as music-industry investment schemes but which the court ruled were artificial tax havens for the super-rich.

The partnerships, set up by a company called Icebreaker Management, allowed musicians to avoid tax on about £63 million from world tours and CD sales following their reunion in 2005. Of the trio Barlow was the biggest investor in the scheme.

Last week a tax judge rejected arguments that more than 50 Icebreaker partnerships had been set up for commercial purposes or for profit. In total about 1000 investors are accused of sheltering more than £300 million through the scheme.

Judge Colin Bishopp said in his ruling: “Icebreaker is, and was known and understood by all concerned to be a tax avoidance scheme. The aim was to secure [tax] relief for members, and to inflate the scale of the relief by unnecessary borrowing.”

The judge concluded that icebreaker members inflated investments through “entirely circular” loans. In doing so they could offset losses against other tax bills.

The judge found that none of the icebreaker partnerships made any profit, investing in a range of obscure artists as well as some well known figures such as Sinead O’Connor, the Irish singer.

“No serious or even moderately sophisticated investor, genuinely seeking a profit... would rationally have chosen an icebreaker partnership,” said the judge.

The members of Take That said they would consider making a public statement this week.

A spokesman for Icebreaker said: “Icebreaker Management is extremely disappointed with this decision since it puts a valuable source of funding for the UK’s independent music industry in jeopardy. Icebreaker will review the full decision and consider all the LLPs’ options including appeal.”

Britain’s complex tax system will come under scrutiny at a hearing of the Treasury Committee in the coming weeks with the HM Revenue & Customs chief executive Lin Homer due to give evidence before MPs.

The committee’s chairman Andrew Tyrie, a Conservative MP, said on Friday: “The more complicated the tax system, the more scope there is for tax avoidance.

“As the Treasury Committee has argued, we need to take every opportunity to simplify it and structured in a way that provides fewer opportunities for tax lawyers and accountants.”